27/08/2014

The sad consequences of not fully naming your intended beneficiaries under your will...

A recent decision of the NSW Supreme Court has emphasized the importance of fully naming your intended beneficiaries in your Will.

In the case of Warton v Yeo, the Will of the deceased person ("the testator") listed various beneficiaries of the testator's estate.   One of the bequests was intended for the testator's sister or her children who survived her.  By the time the Will was looked at, the testator's sister had passed away.  

The question then became whether the step-children of the testator's sister were included in the meaning of 'children', and therefore entitled to her gift, or whether the meaning of the word was limited to biological children.  

The Court attempted to interpret the Will by looking at the intention of the testator and found that:
•    'Stepchild' is not defined in the New South Wales Succession Act 2006 (NSW).
•    Guidance can be sought from the Queensland Succession Act 1981, which restricts the meaning of child or children to the natural or adoptive children of the testator and not to the children of a spouse of the testator.  The step-relationship ceases on divorce.
•    The testator's intention not to include the step-children in the meaning of 'children' was evidenced by the fact that the words 'and step-children' were not used following the words 'child or children' in his sister's bequest.
•    The fact that the plural word was used, as opposed to the singular word 'child', was not sufficient to infer the testator's intention to include the step-children within the meaning of the word.
•    The previous use of the word 'step' before the words 'nephew' and 'niece' in the Will clearly showed that the testator purposely and intentionally made a distinction between the biological child of his sister and her stepchildren.

In the end, the Court found that the testator did not intend to include his step-children in his sister's bequest and the whole of her share passed to her only biological child.  

What does the decision tell us?

Drafting a clear Will is no easy task, particularly because you will no longer be here to shed light on its content when the time comes.

While the Court will try to ascertain your intentions, at the end of the day, only you know what those are.  Interpreting a testator's will is open to conjecture so make the job of the Court easier by stating your intentions as clearly as possible. If you don't, some of your beneficiaries may miss out.

Seek guidance from an experienced estate planning lawyer by calling Townsends Business & Corporate Lawyers on (02) 8296 6222.